Conflict of Interest, Anyone?

The commissioner's office of the NBA vetoed an agreed-upon 3-way trade that would have sent Chris Paul to the Los Angeles Lakers, Pau Gasol to the Houston Rockets, and Louis Scola, Kevin Martin, and Lamar Odom to the New Orleans Hornets.  There was some speculation that Emeka Okafor might also have gone to the Lakers.  Here's David Stern's statement:

Since the NBA purchased the New Orleans Hornets, final responsibility for significant management decisions lies with the Commissioner's Office in consultation with team chairman Jac Sperling. All decisions are made on the basis of what is in the best interests of the Hornets. In the case of the trade proposal that was made to the Hornets for Chris Paul, we decided, free from the influence of other NBA owners, that the team was better served with Chris in a Hornets uniform than by the outcome of the terms of that trade.

This ruling, is of course, ridiculous, and since David Stern has been lying through his teeth for months, I don't particularly see any reason to believe the "free from the influence of other NBA owners" bullshit.  But let's revisit something that Phil Jackson said ages ago:

"Not happy about that," Jackson said, when asked about the purchase.

"Who's going to trade who to whom? Who's going to pull the button on trading player or whenChris [Paul] says he has to be traded? How's that going to go? I don't know. Somebody's going to have to make a very nonjudgmental decision on that part that's not going to irritate anybody else in this league ... I don't know how they're going to do that."

This whole thing leaves a disgusting taste in my mouth.  I'm no longer that happy that we are having an NBA season.  I feel like a kid who got some expensive bike for Christmas, but then my parents explained to me that my Dad had to get a second job so he could afford it and he won't be home nights any more.

Here's the thing, and honestly, I have no idea why this even surprises me. David Stern has screwed up a lot more in the last few years than he used to, as his obsessive desire to micro-manage and control everything has increasingly robbed him of what remains of his common sense.  I hear it's a fairly common phenomenon as people get older; they get more stubborn and their dominant personality traits (in Stern's case: arrogance, obsessions with control) become more entrenched.  This entire situation would have been trivially easy to handle from the get-go.

See, in just about any other business on the planet, conflicts of interest are handled quite simply:  you elect a governor who has absolute autonomy.  It's quite simply a disgrace that the NBA, as owners of the Hornets, has any power whatsoever in the day-to-day decision making, because there are clear conflicts of interest.  And, news flash, Mr. Stern, it does not ****ing matter if the other owners were involved.  What matters is that a) they could have been involved and b) you cannot prove that they were not.  Hello? Um, this is why you elect an autonomous ****ing governor in the first place?  So that you don't get to make any decisions, and nobody can ever accuse you of conflicts of interest.  The appearance of a conflict of interest is every bit as important as an actual one, and Mr. Stern, as a lawyer, knows this quite well.

Here's a real-world example:  you are the vice-president of a large public coproration, and you have a lot of stock options.  Do you:

  • sell stock whenever you want to, and whenever you sell your stock just before it tanks you tell everybody, "Oh, no sir, I mean, I had lots of insider information, but of course that did not actually influence my decision to sell at this time.  You believe me, right?  My word is my bond."


  • appoint a third-party broker to sell your stock at regular, agreed-upon intervals (say, X shares every 3 months), and guarantee the broker autonomy (meaning you can't call him up and say "don't sell this time!")

Take a wild guess which practice is the norm.  This is not rocket science.  And only David Stern's arrogance could ever make him believe that the league office could possibly run the New Orleans Hornets without resorting to an autonomous governor.  Because of the very clear potential of a conflict of interest, it should have been established from day 1 that the Hornets had an autonomous governor (i.e. that Sperling's decisions cannot be overruled by the Hornets' owners), and that any league matters involving the Hornets (trade approvals, disciplinary measures, etc) should be handled by a neutral third party, since the commissionar's office has a clear conflict of interest in any decisions.

The insane thing here is not how Stern's office ruled.  It's that Stern's office even had the power to rule.